What am I missing? Pharo Bull sale

[james coffelt]

LLBux

I see a number of expenses that are not included:

Interest on investment-$45/cow Approximately $750,00 invested at 3.5%= 26250 divided by 600 cows= $44/cow

First, the cattle are not financed, however, the time value of money, has value, I will concede this one, however, the assumption in an investment, is not they are leveraged

No hay cost? Come on now, you are not in Alabama.

Our hay costs this year and last, are zero. I-70 seems to be the line, discuss this with Jim Gerrish, not me

Any mowing expenses?

No mowing, no brushhog

Any seed, fertilizer, lime or chemical expense for the pasture?

None


No vet bills? Do you simply let an animal die if your cowboys can't pull a calf?

[/b]Interesting subject, we make a choice: we know what to do, and the result is a live or dead cow, or a dead cow and a vet bill, it is in the labor[/b]

Under ranch conditions, we lose 3 of 4 calves, and half the cows. Now then, our death loss is about 1%, we use 100% calving ease bulls, i.e., BW under 0

How about pinkeye or worming?

Surely you get foot rot or injury

We moved to Free Choice Minerals, and that has solved our pinkeye issue, I think, one year is not the test.. We do not worm, I have observed no difference in fleshing or death loss [/bo

Do your cowboys preg check everything so you don't carry an open or late calving female through the winter?

We leave the bulls in for 90 Days, everything late or open is culled the following year, no expense. Very few are open , some are late, and are culled

No vaccinations of the cows or calves? You are leaving money on the table if you don't vaccinate before calves are sold.

This is up to the buyer, we do whatever they ask[/b]

Asking or expecting 11 bulls to breed 600 cows in 60 days is asking for trouble. 55 cows per bull?

A yearling bull , developed well, will cover 40 cows, an 18 month old 50, a mature bull-75


Should a bull get injured or go bad you are missing out on as many as 50-75 calves in your model and breeding season.

We have 2 spares


I would think a good manager would use at least 20 bulls, and preferable 25-30 bulls to cover your cows in that 60 days.
You will have youngsters that simply can't do their share and must be allowed to mature.

Your $48,000 allows for about two cheap full time cowboys. Any health insurance paid? Any housing allowance? Meat? Cowboy use of truck for personal use?


We have 1.5 employees for 600 cows, the 48k includes all compensation, It can be done for less


I find it hard to imagine how two cowboys can handle 600 cows calving in sixty days over 9000 acres. Surely you catch and tag them to record birth weight, sex and sire/dam info.


This is low input management, which is way easier than you think





If not, how do you sell bulls and females each year value[/b]

How do you maintain about 20-30 miles of fence at no cost? 9000 acres of pasture equals 14 miles of fence, just around the perimeter. You say you use rotational grazing, so how do you maintain the interior and division fences. Landowner is not expected to maintain that with that information included in the sales catalog.

[b Fence maintenance costs are included, new fence is not, new fence is charged to new cattle [/b]

I am no promoter of the AAA, or RAA, however, this is our management system

It takes one great girl to check cows each day. She checks calves twice per day in May, once there after for calving.

She checks each group every 3 days after calving

I think your fuel costs are low, especially with two trucks, a tractor and various 4 wheelers used to check cattle daily.
Any maintenance expenses on trucks and equipment? I know my diesel truck is about $1000 a year for maintenance and tires.
How about licenses and auto insurance?
How about farm liability insurance?

You are correct, however, there is personal travel in as well.

What are your sale and promotional expenses to get the word out about your livestock and your sale? Web site development and maintenance?

Website is a bout $1k per year

Do you hire additional cowboys to clip or work sales? How about photography?

none

What is your replacement cost for bulls and cows? Figure you should replace 20-25% or so of females and 1/3 of your bulls each year.
You can't exclude the difference in buying an $8000 bull you salvage for $1500. Dropping $500 per cow on 100-150 cows a year must be included. That can't be entirely covered by depreciation.

I don't see the advantage in buying these bulls at $7000-10000 when you can raise some of your own. Surely you can retain the top 2% of your bull calves for in-herd use.


The peer group is key, do you want the best of 10, the best of 100, or the best of a 1000. The bulls are the breeding program, not the cows

If I really sat and thought about it, I'm sure I would come up with more reasonable business expenses that would be included in my tax return.

I see a lot of money left off the table in this low input management plan along with a number of expenses that are not included.

Selling small framed, low growth calves will not be a long term success as buyers will soon recognize the lighter calves you are selling are slow growing and early maturing.

These small frame, efficient, grass finishing cows, easy fleshing, will economically, outperform, every other model, on a per acre production model



They can make more money feeding more efficient, faster growing, larger framed animals that finish at 1400 pounds rather than those that finish at 1000-1100.
They won't be repeat customers and competition for your calves will cease.

Who runs our business? Us, or Feedlots?

Feedlots are in the business of days on feed, and pounds.

Cow / calf producers are in the business, in a production per acre, model,of finishing early. Finish/ fat/marbling takes twice the calories of a pound of bone/flesh, Which is off the scales




\E

 

[Muddy]

James, your post is full of holes. A yearling bull can cover 40 cows???? Zero hay costs? It won't work in northern states...

 

[james coffelt]

Muddy

I-70, per Jim Gerrish (Book: Getting the Hay Out) , seems to be the dividing line.

We are 10 miles north of I-70, and winter with no hay, 2 of 3 years.

I am not guessing, we do it, and few cows will be a BCS below 5.5, or below

Genetics are key.

 

[Ebenezer]

Selling small framed, low growth calves will not be a long term success as buyers will soon recognize the lighter calves you are selling are slow growing and early maturing.

These small frame, efficient, grass finishing cows, easy fleshing, will economically, outperform, every other model, on a per acre production model

They can make more money feeding more efficient, faster growing, larger framed animals that finish at 1400 pounds rather than those that finish at 1000-1100.
They won't be repeat customers and competition for your calves will cease.

Who runs our business? Us, or Feedlots?

Feedlots are in the business of days on feed, and pounds.

But you do not grow your cattle for the feedlot, if I understand your plan. You are, in a sense, off the grid or "on your own" to avoid the normal market of commodity cattle? So do the feedlots or the feedlot value system play any role in your cattle? I think not.

These small frame, efficient, grass finishing cows, easy fleshing, will economically, outperform, every other model, on a per acre production model

What I think has LLBux wondering is the issue of production versus profit. You max out production, in theory, with small packages. But you also have to self-market to max out the profit of small packages and specialty odds and ends like old cow beef. So total success depends on your marketing success with a higher risk than commodity sales, if I get the whole picture. The average USA cattleman is willing to minimize risk or increase market window width by having cattle that will be desired by order buyers, other commercial growers and the commodity beef route. This is done in medium and large packages. Crossbreeding is the efficient means to take a herd of cows in medium packages and sell calves in large packages. Or even the medium packages, with good traits, can interest buyers of commodity beef for premiums and sale topping prices.

In a sense, it is all about marketing and then making a system to max the market. If all readers could grasp the huge difference in standard sizes of medium and big for the majority of the standard market versus the specialty package size of small for a narrow and self-developed and self-risk market then there would be little discussion except for evangelism and potential breeding stock sale efforts from either side of the river. We are truly discussing apples and oranges and they do not hybridize.

 

[james coffelt]

EB

Your points are good ones.

The commodity business, is by definition, breakeven. That is why it is called the "commodity" business.

A low input management model, with high stocking, provides an advantage.

That high stocking, in a production per acre model, not per head, is another advantage.

If someone has 10 million in land, and the appreciation of the land, plus cattle net revenue, is less than 10%, it is best to sell out.

Our farms/ranches are an asset to be managed, for good. We should be the best stewards of this wealth, I often think we (farmers/ranchers) are the worst.

 

[Ebenezer]

The commodity business, is by definition, breakeven. That is why it is called the "commodity" business.

Unproven opinion to make your case seem even or superior to standard and wider marketing options. If your opinion is true then no commercial cattleman can never make or has ever made a living with commodity type cattle. That is not true. If you produce for the commodity market then you do not lose the $200 per head on small framed cattle. Normal cattle are a business and can be profitable. I will not dismiss all commercial cattlemen and cattlewomen as rubes and pawns to make my case.

Full Definition of commodity

plural com·mod·i·ties

1 : an economic good: asa : a product of agriculture or mining b : an article of commerce especially when delivered for shipment <commodities futures>c : a mass-produced unspecialized product <commodity chemicals> <commodity memory chips>
2 a : something useful or valued <that valuable commodity patience>; also : thing, entity b : convenience, advantage
3 obsolete : quantity, lot
4 : a good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors (as brand name) other than price
5 : one that is subject to ready exchange or exploitation within a market <stars as individuals and as commodities of the film industry — Film Quarterly>

 

[LLBUX]

Mr. Coffelt-

Thank you for agreeing with many of my points and expenses that I asked about yesterday.

I agree that low input and low maintenance cattle can produce a nice profit for a producer in the short term of a few years, or for a person selling smaller calves.

You continue to go back to the low input model with high stocking rates of smaller framed cattle.
I'm sorry, but I have not seen a statement regarding what you do with the calves you do not sell through production and bull sales?
If sold to feeders, these small cattle will be very hard-pressed to make a profit for the guy feeding them out.

I respectfully disagree with a philosophy that does not allow for a profit for the next guy who buys and feeds cattle.

As I have mentioned, it won't be long before you no longer have a strong market for your calves.

Regarding no inputs or maintenance on pasture-
I have always been taught that pastures need fertilizer and maintenance too. Your high stocking rates are sure to remove the P and K from the soils. Pastures need a shot of lime from time to time too, A shot of nitrogen does wonders in producing the lush grass a cow needs to add weight to that calf. With nobody caring for the land's fertility, mowing, cutting thistles or removing brush, the pasture will gradually go to pot, leaving your landowners the expense of clearing, fertilizing, liming, and reseeding. That won't go over very well or very long.

That reminds me of a guy who used to farm my mother in law's ground. He ran a low input system and put very little fertilizer on and no lime. He skimped on herbicides as well. Thanks to the naturally fertile ground, he got 175 bu corn and 50 bu beans.
When I took over the management, I took soil samples and found P and K levels to be extremely low. Soil pH was at 5.8-6.2. It took me several years and lots of cash to get P and K levels up and soil pH into a more acceptable range. I still need to add more lime as you can only put on so much at a time. Now my corn averages 225-250 and beans are normally around 70 bu. I am still paying for that guy's low input system and will for several more years.

Maybe he made more money in the short term, but he lost the ground and opportunity in the long run. It will cost him farming opportunities in the future as well since, like most folks who are wronged, I will not be hesitant to share my experiences.

Animal and soil husbandry is so much more than making an immediate profit.
I believe it is leaving the animals healthier, and land in a better state than when you stepped on it.
I'm not sure that is the case under the low input system you ascribe to.

 

[james coffelt]

EB , my response is in your text, thanks:

The commodity business, is by definition, breakeven. That is why it is called the "commodity" business.

Unproven opinion to make your case seem even or superior to standard and wider marketing options. If your opinion is true then no commercial cattleman can never make or has ever made a living with commodity type cattle. That is not true. If you produce for the commodity market then you do not lose the $200 per head on small framed cattle.

The low input model, with moderate cattle, outperform performance cattle, by a 20% margin, with higher stocking, all day long. I am not guessing, we have the numbers here.

Normal cattle are a business and can be profitable.

Cattle men/women are the highest quality people we could ever group up, you included. What is wise?, the best?, that is the question

I will not dismiss all commercial cattlemen and cattlewomen as rubes and pawns to make my case.

Full Definition of commodity

plural com·mod·i·ties

1 : an economic good: asa : a product of agriculture or mining b : an article of commerce especially when delivered for shipment <commodities futures>c : a mass-produced unspecialized product <commodity chemicals> <commodity memory chips>
2 a : something useful or valued <that valuable commodity patience>; also : thing, entity b : convenience, advantage
3 obsolete : quantity, lot
4 : a good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors (as brand name) other than price
5 : one that is subject to ready exchange or exploitation within a market <stars as individuals and as commodities of the film industry — Film Quarterly

Ranchers/farmers manage huge assets, in land, cattle, resources. How are we doing as a group? I would suggest poor.

 

[james coffelt]

LLBux, Good post, thanks, See me response in your text:

Mr. Coffelt-

Thank you for agreeing with many of my points and expenses that I asked about yesterday.

I agree that low input and low maintenance cattle can produce a nice profit for a producer in the short term of a few years, or for a person selling smaller calves.

They are 30#, smaller, with 20% more of them

You continue to go back to the low input model with high stocking rates of smaller framed cattle.
I'm sorry, but I have not seen a statement regarding what you do with the calves you do not sell through production and bull sales?
If sold to feeders, these small cattle will be very hard-pressed to make a profit for the guy feeding them out.

They go into the all natural market, at the top of the market, with the exception of the last 20 - 30, which go to the sale barn

I respectfully disagree with a philosophy that does not allow for a profit for the next guy who buys and feeds cattle.

As a steward , we run this business, the next link in the chain is their business

As I have mentioned, it won't be long before you no longer have a strong market for your calves.

We sell beef, seed stock, bulls, calves are a by product, and of little concern.

Regarding no inputs or maintenance on pasture-
I have always been taught that pastures need fertilizer and maintenance too. Your high stocking rates are sure to remove the P and K from the soils. Pastures need a shot of lime from time to time too, A shot of nitrogen does wonders in producing the lush grass a cow needs to add weight to that calf. With nobody caring for the land's fertility, mowing, cutting thistles or removing brush, the pasture will gradually go to pot, leaving your landowners the expense of clearing, fertilizing, liming, and reseeding. That won't go over very well or very long.

Our ground has been strip mined 60 years ago. The PH is 7.2 naturally, we use Free Choice Minerals, which run thru the cows, and
re mineralize the soil, 90% is out the back end. Cattle are the best answer to rehabbing ground.

That reminds me of a guy who used to farm my mother in law's ground. He ran a low input system and put very little fertilizer on and no lime. He skimped on herbicides as well. Thanks to the naturally fertile ground, he got 175 bu corn and 50 bu beans.
When I took over the management, I took soil samples and found P and K levels to be extremely low. Soil pH was at 5.8-6.2. It took me several years and lots of cash to get P and K levels up and soil pH into a more acceptable range. I still need to add more lime as you can only put on so much at a time. Now my corn averages 225-250 and beans are normally around 70 bu. I am still paying for that guy's low input system and will for several more years.

This cattle ground is some of the best in the country, please visit, and be my guest at our home.[/b]







Maybe he made more money in the short term, but he lost the ground and opportunity in the long run. It will cost him farming opportunities in the future as well since, like most folks who are wronged, I will not be hesitant to share my experiences.

Animal and soil husbandry is so much more than making an immediate profit.

Profit is not an option, it is required

I believe it is leaving the animals healthier, and land in a better state than when you stepped on it.

This is a business, not a ministry


I'm not sure that is the case under the low input system you ascribe to.

 

[Muddy]

You might rethinking about the calves, as we depends on the calves for income. I seen most folks complained that pharo cattle are too small for commerical purposes and small framed calves are hurting their business. Why we should using smaller framed cows if they raises small calves that brings less money?

 

[james coffelt]

You might rethinking about the calves, as we depends on the calves for income. I seen most folks complained that pharo cattle are too small for commerical purposes and small framed calves are hurting their business. Why we should using smaller framed cows if they raises small calves that brings less money?

Because you can run 20% more, that produce more protein per acre, that finish easier, into a premium market.

 

[Dave]

I am glad that the way you manage your operation is working well for you. I wish you nothing but success. But realize it is a big old world out there and other people don't have your location and environment. So what works for you may only apply a little for others. Some other point you have may work for someone else. There are however, a lot of people whose operation is so totally different from yours that nothing you are doing applies to them. This is after all a business and there are a huge number of factors that will affect an individuals business model.
My wife owned a ranch in Southeastern Oregon. She spent a lot of days riding in a "pasture" that held 300+ pairs. After spending an entire day in the saddle and using binoculars to look for cattle but not seeing a single animal. How does that compare to your operation? When it is a 3 hour drive to the nearest town which only has 2,000 people it is a little difficult to do direct marketing.
I could go on for a pretty long post of different operations that are located in environments which are totally foreign to yours and what you are doing that your model simply wouldn't succeed.
I apologize if I am reading you wrong but you do come across like your model is the only way to succeed.

 

[james coffelt]

Dave

I intend to offend no one, especially your wife.

We are discussing the cattle world, which has nothing to do with your wife, or you.

Lets get on with the discussion.

 

[Banjo]

Mr. Coffelt-

Regarding no inputs or maintenance on pasture-
I have always been taught that pastures need fertilizer and maintenance too. Your high stocking rates are sure to remove the P and K from the soils. Pastures need a shot of lime from time to time too, A shot of nitrogen does wonders in producing the lush grass a cow needs to add weight to that calf. With nobody caring for the land's fertility, mowing, cutting thistles or removing brush, the pasture will gradually go to pot, leaving your landowners the expense of clearing, fertilizing, liming, and reseeding. That won't go over very well or very long.

That reminds me of a guy who used to farm my mother in law's ground. He ran a low input system and put very little fertilizer on and no lime. He skimped on herbicides as well. Thanks to the naturally fertile ground, he got 175 bu corn and 50 bu beans.
When I took over the management, I took soil samples and found P and K levels to be extremely low. Soil pH was at 5.8-6.2. It took me several years and lots of cash to get P and K levels up and soil pH into a more acceptable range. I still need to add more lime as you can only put on so much at a time. Now my corn averages 225-250 and beans are normally around 70 bu. I am still paying for that guy's low input system and will for several more years.

Maybe he made more money in the short term, but he lost the ground and opportunity in the long run. It will cost him farming opportunities in the future as well since, like most folks who are wronged, I will not be hesitant to share my experiences.

Animal and soil husbandry is so much more than making an immediate profit.
I believe it is leaving the animals healthier, and land in a better state than when you stepped on it.
I'm not sure that is the case under the low input system you ascribe to.

Animal husbandry and grain farming are two different things....apples and oranges almost.
If you want to wear out a piece of ground just mono-crop it for years with no inputs. That is just what the settlers did 150 or so years ago. Farming a farm with corn every year(plowing) for a few years till it was exhausted then moving on to another one.
With livestock just the opposite is taking place. Cattle are recycling nutrients plus feeding soil life which in turn builds soil.
Allen Savory made the comment once that the cattle farms in the U.S. are mostly understocked and overgrazed.
How did the great plains support all those bison for thousands of years with no fertilize and lime?

 

[sim.-ang.king]

Dave

I intend to offend no one, especially your wife.

We are discussing the cattle world, which has nothing to do with your wife, or you.

Lets get on with the discussion.

Good job dodging that one... :roll:

 

[Banjo]

You might rethinking about the calves, as we depends on the calves for income. I seen most folks complained that pharo cattle are too small for commerical purposes and small framed calves are hurting their business. Why we should using smaller framed cows if they raises small calves that brings less money?

Because you can run 20% more, that produce more protein per acre, that finish easier, into a premium market.

I would argue that most farmers could run 20% more just by intensive grazing vs. passive or conventional grazing.

 

[Muddy]

Well before the settlers came and wiped out the buffalo populations, they were migrating animals.

 

[Muddy]

You might rethinking about the calves, as we depends on the calves for income. I seen most folks complained that pharo cattle are too small for commerical purposes and small framed calves are hurting their business. Why we should using smaller framed cows if they raises small calves that brings less money?

Because you can run 20% more, that produce more protein per acre, that finish easier, into a premium market.

Even if you're giving up $$$ for the small calves?

 

[james coffelt]

I am having trouble keeping up here:

Muddy,

We have 20% more calves, on the same forage, which sell at a higher price. Production per acre is the model, not production per head

LLBUX, the cattle, with a mineral program, in my opinion, is the best ministry for pasture possible. They control the brush, they distribute the minerals, they keep the forage growing, which benefits the wildlife, hunting is our second largest enterprise.

This mined ground was full of limestone, which produces a high PH, they reclaimed the ground with crown vech, deep rooted, nitrogen fixing, legume, and locust trees, which interestingly, are also a legume and not a tree.

Here is our grass, I think we are doing OK:


Muddy:

The grass finished sector is in need of suppliers, who have you called?, what adds have you run? , to explore the same. Trucks move cattle every day. Figure it out, this is entrepreneurship.

Feed lots and sale barns do not run our business, we do.

 

[james coffelt]

You might rethinking about the calves, as we depends on the calves for income. I seen most folks complained that pharo cattle are too small for commerical purposes and small framed calves are hurting their business. Why we should using smaller framed cows if they raises small calves that brings less money?

Because you can run 20% more, that produce more protein per acre, that finish easier, into a premium market.

I would argue that most farmers could run 20% more just by intensive grazing vs. passive or conventional grazing.

Banjo

I agree.

Jim Elizondo was here for a couple days.

We use rotational grazing. He believes we could double stocking rate, with non selective, mob grazing.

That changes the game.